African countries which enjoy peace,
political stability and where freedom is freely expressed has shown constant
economic growth and stability compared to countries where there is no peace and
political stability. Conflicts, political instability and social differences
(way of living, better opportunities) in Africa compared to western countries
has been a major cause of a large number of qualified African professions in
diaspora, which has created professional backlog and affected growth in Africa.
Over the last decade, trade has attributed to most growth in Africa but this
growth has not been inclusive due to political instability, conflicts, high
corruption, high youth unemployment rate and other factors in some African
countries.
Informal economic activities are very
common and is considered to be the source of income for millions of families in
most African countries especially in Sub-Saharan Africa. The main causes of
informal sector are lack of sufficient opportunities created by the formal
sector, high unemployment rate which is caused by economic, political instability,
crisis and conflicts. The informal sector is posed by many challenges such as
lack of decent working conditions, informal workers’ rights are often violated,
and workers are poorly protected and fluctuating income. The informal sector
create employment opportunities and is the only source of income for millions
of women and young people in Africa. Therefore any transformation to formality
should ensure that revenue is not lost for informal workers.
The International Labour Organisation
(ILO) state that the difference between formality and informality has often been
attributed to more than one meaning/interpretation, and that formalisation is a
step by step process and can take a very long time to be realised. Moving out
of informality will require societies/communities and all who operate in it to
become formal themselves, which doesn’t happen overnight. So society with the
help of organisations of good will (NGOs, charitable organisations etc.) can
build a bridge between formality and informality. Bridging the gap between
formality and informality will also require a change in perception in the
society/community, some people tend to go into informal business as a way of
evading tax and administration hustles in the formal sector.
According to ILO, Social economy
refers to organisations such as cooperatives, NGOs, which produce goods,
provide services and knowledge while satisfying both economic and social
objectives. Social economy has been identified as key to bridge the gap between
informal and formal sectors of the economy, thus increasing income, profits,
productivity and competition. This can be achieved by combining social
objectives with economic growth sustainability, to create opportunities,
empower, protect and increase the bargaining power of informal workers.